Components Corporate

BS VI Special – JK Fenner

September 3, 2019
motorindia

JK Fenner is a name that has been synonymous with quality mechanical power transmission, sealing and fluid transfer solutions for the last many decades. Given the company’s direct involvement in the transition to BS-VI, we spoke to Mr. Mohan, Business Head – Polymer, JK Fenner (India) Ltd., to find out how things are expected to unfold from April 2020.

Mr. Mohan, Business Head – Polymer, JK Fenner (India) Ltd.

Excerpts:

Market impact

BS-VI is a move towards vehicles becoming more environmental-friendly. There will be a cost impact due to the changes needed to comply with BS-VI norms and the major impact will be in diesel engines. Temporarily, a volume drop is likely during the changeover period.

Cost implications

To cushion the cost impact, the OEMs and tier-1 suppliers are working on cost reduction initiatives. At JK Fenner, we are equipped with value-added products which could help the OEMs in mitigating the cost impact. This has given us good opportunities in the 2W and LCV segments.

Challenges

  • Fleet owners’ earnings will drop as a consequence of fuel cost and vehicle cost increase, till such time freight rates get absorbed.
  • The sluggish demand adds to the woes of all the stakeholders.
  • Small diesel engines are moving towards phase out; alternate fuels like CNG are options but have their own constraints.

Opportunities

  • Technology upgradation.
  • In the long-term, the refinement of BS-VI engines may assist in complying with Corporate Average Fuel Economy (CAFÉ) norms.
  • Major OEMs are leveraging this change-over to standardise components across platforms – lower variety leads to cost benefits, including development costs and manufacturing investments.

Outlook

  • The revision in axle norms have eaten into approximately two years’ equivalent of CV demand. Hence pre-buy could get overshadowed by the demand drop due to axle norms revision.
  • Not much of demand resurgence is likely in H2 2019-20, however, the Government is planning many actions to revive the market growth.
  • Our company’s growth targets for FY19-20 in most automotive segments are not encouraging. We expect demand to pick up from early FY20-21.